Home / CY AIF Law of 2018 / PART ΙΙ: PROVISIONS REGARDING THE ALTERNATIVE INVESTMENT FUNDS / Chapter 1: General characteristics and distinctions of AIFs / [09] Umbrella AIF

9. Umbrella AIF.

(1) AIFs may be established and operate as AIF with more than one investment compartments, and each compartment shall be subject to the provisions of this Law as a separate AIF:

It is provided that an umbrella AIF is a single legal entity and therefore no separate fund rules or instruments of incorporation are drawn up.

(2) Each of the investment compartments of the umbrella AIF issues units, which correspond to the assets and obligations the specific investment compartment holds or has, and the value of units issued by each of the investment compartments of the umbrella AIF may differ.

(3)(a) The rights of unitholders and the claims of creditors or the liabilities arising in connection to the establishment, operation, liquidation and dissolution of an investment compartment, are limited to the assets of that investment compartment:

It is provided that, without prejudice to the provisions of paragraph (b), the assets of an investment compartment are exclusively available to satisfy the rights of unitholders and the claims of creditors or the liabilities of that investment compartment, and must not, in any case, be used to satisfy the rights of unitholders and the claims of creditors or the liabilities of other investment compartments.

(b) When the AIF is addressed to professional and/or well informed investors, its fund rules or instruments of incorporation may provide for derogation from paragraph (a).

(4) The fund rules or instruments of incorporation of an AIF which is established and operates as an umbrella AIF -

(a) provide that the AIF may create investment compartments and operate with more than one investment compartments,

(b) include the operational rules applicable to each investment compartment,

(c) without prejudice to the provisions of paragraph (b) of section (3), provide that the assets of an investment compartment belong exclusively to that investment compartment and must not be used, directly or indirectly, to satisfy the rights of unitholders and the claims of creditors or the liabilities of another investment compartment.

(5) An investment compartment of an AIF (“the Investor Compartment”) may invest in another investment compartment or compartments of the same AIF (“the Target Compartment”), where that option is provided in the fund rules or the instruments of incorporation of the AIF and provided that the following conditions are complied with:

(a) the Investor Compartment invests in total up to 35% of its assets in a Target Compartment∙

(b) the Target Compartment shall not invest in the Investor Compartment∙

(c) the voting rights, if any, attached to the units corresponding to the investment made by the Investor Compartment in the Target Compartment, are suspended for as long as they are held by the Investor Compartment∙

(d) the value of the units that correspond to the investments of paragraph (a), is not included twice in the calculation of the net asset value of the AIF which operates in the form of a common fund, or of the capital of the AIF which operates in the form of an investment company or limited partnership∙

(e) any remuneration or management fees, marketing, redemption or repurchase fees, as well as any expenses regarding the marketing, redemption or repurchase of units related to the investment of the Investor Compartment in the Target Compartment shall not be charged.

(6) The granting of authorisation and operation of an AIF investment compartment is subject to the provisions of this Law:

It is provided that, the Securities and Exchange Commission may withdraw the authorisation of one or more investment compartments of the umbrella AIF, subject to the provisions of this Law, without withdrawing the authorisation of all investment compartments and/or the authorisation of the AIF itself.

(7)(a) Each investment compartment of the umbrella AIF is being dissolved and liquidated separately, without its dissolution and liquidation resulting in the dissolution and liquidation of other compartments of the AIF or of the AIF itself.

(b) During the liquidation of an investment compartment which will be dissolved, all its obligations shall be settled.

(c) The procedure for the dissolution and liquidation of an investment compartment of an umbrella AIF established as a common fund shall be governed by the provisions of article 52(3) to (6)∙

(d) By way of derogation from article 63(2) and (3), the procedure for the dissolution and liquidation of an investment compartment of an umbrella AIF established as an investment company shall be governed by the provisions of article 52(3) to (6):

It is provided that, this paragraph applies to AIFLNPs, as if the reference to article 63(2) and (3) is a reference to article 132(2) and (3)∙

(e) The procedure for the dissolution and liquidation of an investment compartment of an umbrella AIF established as a limited partnership shall be governed by the provisions of article 74(3) to (7).

(8) The Securities and Exchange Commission may, by means of a directive, define any additional information to be included in the fund rules or the instruments of incorporation of the umbrella AIF and regulated any other matter related to the establishment, operation and the dissolution of an umbrella AIF.